Zloty Retreats as Polish Unemployment Rises, Retail Sales Slow

The zloty retreated from its strongest level in more than three months after a report showed Polish unemployment rose in November while retail sales grew at the slowest pace in 31 months.

The zloty lost 0.6 percent to 4.0809 per euro at 5 p.m. in Warsaw, snapping a three-day winning streak. It has appreciated 9.4 percent this year for the best gain after the Hungarian forint among 174 currencies tracked by Bloomberg. The yield on 10-year notes slid six basis points, or 0.06 percentage point, to a record low of 3.71 percent and on course for its steepest annual decline in a decade.

Polish retail sales rose 2.4 percent from a year earlier in November, the worst pace since April 2010, as unemployment climbing to 12.9 percent discouraged consumer spending. The European Union’s biggest eastern economy is feeling the impact of the recession in the euro area, prompting the central bank to cut rates by a quarter point for a second month in December.

“The tendencies in retail sales and on the labor market fit in the picture of a deteriorating economy and increase the chance of more interest rate cuts,” Grzegorz Maliszewski, chief economist at Bank Millennium SA (MIL) in Warsaw, wrote today in an e- mailed note to clients.

To contact the reporter on this story: Piotr Skolimowski in Warsaw at pskolimowski@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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